Everyone in today's world keeps hearing the term financial planning and how it is needed. Personal finance and financial planning are used in conjunction always. That said for having that financial plan ready you need to know a few things. These things which we need to have are crucial to achieving that financial security and will help one get that desired money which is needed for old age and other special family needs.

Very few people can get the basics right about financial planning. Most understand it to be just about money being in bank account at all times. This money they assume will help them tide over a few things. This though is not adequate as the value of this money will diminish over time and by the time retirement is reached you will for sure be scrambling to make ends meet.

That is why all the experts stress the need for financial planning.It is the money at hand that will save you in dire situations.

Here are a few things that you need to take care of for effective planning. These will help you get the facts correct and will help you make some intelligent decisions.

First and foremost thing that you need to consider is your cash situation today. This will give you a picture as to whether you are on the right track or not. This will at least give that overall [picture of your finances. This exercise you can do it all alone or by getting the help of a financial planner.

Secondly you need to know the importance of investments. You can not allow your money to languish in the banks at 2% p.a. This entails working in tandem with a financial adviser to know what kind of investment avenues are available and how best they can meet your needs.

Third step is to have insurance for almost everything. That will help you protect your assets should things go wrong.

Fourth step is to have the effective taw strategies. I am not talking about avoiding tax altogether but at least work towards having the tax incidence reduced to a minimum. That will help your cash flow and will make sure that you have enough cash for planning.

That said all the four things above go a long way in achieving you desiredfinancial goals. Remember to have effective retirement cushion as one of the goals of your financial strategy.